The answer: they are all subsidiaries of GMAC. What used to be General Motors’ financial arm got spun off some years ago, heavily invested in mortgage loan financial instruments and took a real thrashing. Since the crash in 2008, GMAC has become Ally Bank, shifted all of its bad divisions into a new subsidiary called RESCAP, and last week put RESCAP into Chapter 11 to reorganize its debts.

So that long list of businesses is owned by RESCAP. And RESCAP is owned by by Ally Bank, nee GMAC, nee General Motors Acceptance Corporation. And who owns Ally Bank? You do, you the American taxpayer. To the extent of 73.8% of issued and outstanding shares. The next biggest shareholder is Cerberus Capital Management, a private equity firm. You know, like The Mitt’s Bain Capital.

Oddly enough, Ally Bank as a whole was profitable, earning more than $1 billion in 2010. But its RESCAP subsidiary, where all of those carrion collateralized debt obligations had been dumped, was a serious drag. In fact, RESCAP contributed to Ally Bank’s failure to pass the Federal Reserve Bank’s “stress test” in March 2012. Hence, Chapter 11.

With 73.8% of the shares, the United States controls the board of directors of Ally Bank. So we have the picture of the United States voting to put part of a company it had rescued from financial ruin into bankruptcy. Which will doubtless injure the many creditors of RESCAP. None of whom are likely to be rescued from financial ruin by the U.S.

And a further consequence will be that all of the mortgages held by all of those various investors, Dietech through RFC, and likely others besides, will be frozen, with the homeowners unlikely to be able to work anything out, until the Chapter 11 is resolved. Those injured by RESCAP’s many subsidiaries won’t be able to pursue their claims. GMAC/Ally/RESCAP is headquartered in Michigan, and a high percentage of its loans are there. The Chapter 11 will add to that state’s misery. The federal government’s policy of helping homeowners saddled with bad loans will be deeply frustrated by . . . the federal government.

Even when every step along the way is logical and sensible, the outcomes can be contradictory, self-defeating and circular. GMAC Bank was too big to fail. The rest is just consequences.

It’s true in two ways. Homeowners suing for fraud or misrepresentation – a series of class action lawsuits – will be “stayed,” enjoined from proceeding further without permission of the bankruptcy court. 11 U.S.C. §362. That’s not commonly granted. So there’s no relief through litigation.

Additionally, a kind of mid-level paralysis sets in when a company goes into Chapter 11. Call it survival mode. Or, if you are cynical, line employees and middle management are spending so much time on polishing resumés and scheduling job interviews that nothing substantive gets done.